$mart Holiday Shopping – Holiday Budgeting 101
For many of us, November and December kick off a season of celebrating, family, feasting, and yes … spending. The holidays are a chance to make memories, but this can also be a time of financial stress. Here are a few tips to help you save this season.
Create a holiday spending plan.
Putting together a holiday budget can help you curb your holiday spending and relieve financial stress. To create a budget, start by looking at what you spent last year. Consider how the amount you spent impacted your budget. For instance, were you paying off credit card bills for months after the holidays? Did you have to skip the family summer vacation because the holidays were too expensive?
As you create a budget, look at each individual holiday expense. Try to be as comprehensive as possible. Think about:
- Gifts for immediate family
- Gifts for extended family
- Gifts for friends, neighbors and coworkers
- Travel expenses like gas, flights and hotels
- Food and party supplies
- Holiday cards
- Postage and shipping
- Gift wrap supplies
- Interior and exterior decorations
Add up what you plan to spend and determine whether that spending fits inside your budget. Remember, nothing is set in stone, especially during a busy holiday season. You’re in charge of your plan and your goals. Review your holiday spending plan and adjust to trim expenses or direct money toward something different.
Use your rewards.
If you use a credit card or debit card with rewards points or cash back, the holidays are a great time to put those perks to good use.
This feels like “free money” you can use to purchase gifts, pay for travel and more. Remember, when using your credit card, only spend what you can realistically pay off before interest hits. Spending money you can’t afford can easily send you into debt (and feeling regret)!
Plan for next year.
If you’re tired of feeling the holiday pinch, start saving for the next holiday season now.
Break your targeted budget into doable chunks, whether that’s a daily, weekly or monthly amount. Finding $25 or $50 in your monthly budget is a lot easier than trying to find $300 or $600 when the holidays roll around. Even if you only plan to save half of the amount, you’re still doing your future self a favor.
To make saving even easier, open a separate holiday savings account and set up recurring transfers that help you hit your target. Many financial institutions, like Educators Credit Union don’t charge for additional saving accounts.
Simplify the season.
For less financial stress, consider simplifying celebrations and entertaining. Rethink expensive gifts, complicated decorating, holiday cards and other pricey traditions. Instead, consider setting a gift limit or arranging quality family time. Visit a museum, plan a movie night, volunteer with friends and family, or try snow tubing or sledding to honor the season. After the event, gather for hot chocolate or a budget-friendly potluck. Spending time with people you love is a true gift.
This article was created in partnership with Banzai and GreenPath.